25 Jun 2021
EU informally agrees to grace period extension for Northern Ireland Protocol
EU Member States are understood to have informally agreed to a three-month extension of the ‘grace period’ on customs checks for chilled meats being imported to Northern Ireland from Britain. The extension allows the UK to avoid unilaterally extending the grace period, as it has already done once before.
However, the extension is likely to be subject to caveats to be worked out between the UK and EU. The EU is expected to demand that the UK continues to align with EU food and safety standards for the duration of the extension. In the meantime, both sides are continuing talks to negotiate a long-term solution to disagreements over the implementation of the Northern Ireland Protocol.
Also this week, the UK has started formal negotiations on accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which is made up of 11 member countries including Japan, Singapore and Australia. The CPTPP is one of the largest free trade areas in the world, accounting for 13% of global GDP in 2019. International Trade Secretary Liz Truss MP said the Asia-Pacific region was “where Britain’s greatest opportunities lie” as she began the talks for a trade deal.
18 Jun 2021
Sausages, mince and ham: grace period deadline fast approaching
With the UK and EU clashing over the Northern Ireland Protocol – and with the 1 July deadline of the ‘chilled’ meats grace periods approaching – the likelihood of a wider breakdown in UK-EU trade relations has considerably increased.
The UK-EU Withdrawal Agreement sets out mechanisms to handle disagreements between the UK and the EU over the Northern Ireland Protocol, including how to enforce penalties in circumstances of non-compliance. As a result of the UK unilaterally extending grace periods under the Protocol, the EU has already commenced enforcement proceedings. Should a resolution not be reached in the Joint Committee, the EU could escalate the dispute into an official arbitration panel which could result in financial penalties and suspension of the Withdrawal Agreement. Ultimately, if no agreement over Northern Ireland is achieved, the prospect of a further breakdown in trading relations between the UK and EU becomes likely.
The EU has indicated that, should matters continue to deteriorate, it will go beyond suspending parts of the Withdrawal Agreement and begin to suspend parts of the UK-EU Trade and Cooperation Agreement. The EU has also explicitly stated that this could mean the burden of tariffs on EU goods and suspending quota agreements.
In terms of next steps, there is no set timeline as to when the above measures could be implemented. Should the UK further extend grace periods, then this could lead to the Commission taking swift steps in the coming weeks.
1 Jun 2021
Brexit, trade and consultations
UK industry groups remain divided over a controversial post-Brexit trade deal with Australia, which would see tariffs phased out over a 15 year period. National Farmers Union President Minette Batters has warned of the “massive impact” that removing tariffs would have on British farms and further, Northern Ireland Agriculture Secretary and recently elected leader of the DUP Edwin Poots has stated that he is “strongly opposed” to the removal of tariffs. On the other hand, those in favour of the deal maintain that the UK would have sufficient time to prepare and would be able to increase sales of other rural exports.
Continuing the theme of post-Brexit trade deals, the UK Government has opened a consultation ahead of launching talks to secure a trade deal with India. International Trade Secretary Elizabeth Truss MP described India as “a huge market for British goods like whisky, cars and services”. The consultation refers to the total trade in goods and services between the UK and India reaching over £23 billion in 2019, a figure the UK Government hopes to double by 2030.
The UK Government has also launched a review of tariffs against the US in response to the ongoing trade conflict around steel and aluminium. The UK currently has measures in place on products such as whiskey, motorcycles and tobacco in response to US tariffs. In a recent press release from the Department for International Trade, Elizabeth Truss stated “we now have the power to shape these tariffs so they reflect UK interests, and are tailored to our economy.”
22 May 2021
Agricultural update: split Cabinet over Australia trade deal and Northern Ireland’s Agriculture Minister elected as DPU leader
Despite Prime Minister Boris Johnson’s Cabinet being divided over whether to provide zero-tariff access to the UK markets for Australia as part of its Free Trade Agreement, the UK has offered trade deal terms under which both countries would phase out taxes on imports over 15 years. This deal would make it easier and cheaper for Australian farmers to export products such as lamb and beef to the UK. Concerns have been raised among farmers and the devolved governments in Scotland and Wales, where beef and sheep farming is central to local economies. The Environment Secretary George Eustice, stated that the government cannot “sell out” farmers across the UK. Johnson, on the other hand, stated that there are “huge opportunities for our farmers”.
Meanwhile, in Northern Ireland, Agriculture Minister Edwin Poots has been elected as the leader of the Democratic Unionist Party by a majority of 19 votes to 17. Poots will not take up the role of First Minister, instead remaining as Agriculture Minister, however, he will likely appoint someone who has equally adopted a hard-line approach to the Northern Ireland Protocol.
4 May 2021
The Irish Question
In an attempt to try and de-escalate the issue of the Northern Ireland Protocol, UK Cabinet Office Minister Lord Frost met with European Commission Vice President Šefčovič on 16 April. Both sides agreed a joint statement saying that any solutions to the Protocol “had to be consistent with the overriding commitment to respecting the Belfast (Good Friday) Agreement in all its dimensions and to ensuring minimum disruption of everyday lives in Northern Ireland.” With the commitment from both sides to continue discussing the issue, there is hope that the dispute on the Protocol can be cooled.
New checks and trade barriers as a result of the Northern Ireland Protocol have led to restrictions on goods going from Great Britain to Northern Ireland. There have also been instances of goods being blocked because they do not adhere to the EU’s regulatory standards. Tensions remain high within Northern Ireland’s Unionist community, including instances of public disorder and rioting. Should matters remain unresolved, there is a risk that the EU continues to pursue legal action or takes economic measures against the UK, such as imposing tariffs.
30 Apr 2021
UK and EU Relations - state of play
The European Parliament has now ratified the EU-UK Trade and Cooperation Agreement (TCA), which had been applied provisionally since 1 January 2021. The TCA will permanently enter into force on 1 May.
Meanwhile, relations between the UK and EU remain poor. The vaccine exports disagreement highlighted this uneasy situation, with the relationship between the UK and EU reaching a new low earlier this year when the EU Commission threatened to block vaccine exports in the UK, to which the UK said that it would consider retaliatory measures. However, the disagreement seemed to fizzle out when it became clear that the two sides were mutually reliant on one another.
The overall sentiment during the European Parliament session was one of a growing sense of distrust of the UK. Nevertheless, MEPs agreed that the successful ratification of the TCA brings with it more certainty and stability.
15 Apr 2021
The UK Trade and Business Commission formally launched
The UK Trade and Business Commission formally launched The Commission has been set up to scrutinise the UK and the EU’s Trade and Cooperation Agreement, as well as any other new trade deals. The Commission brings together eleven MPs from nine different parties and all four nations of the UK, along with business leaders and expert economists. It is convened by Rt Hon Hilary Benn MP, and Peter Norris, the Chairman of Virgin. Benn commented that the Commission “brings together parliamentarians and business leaders and will have an intensely practical focus on the problems businesses are facing”.
The Commission will take oral and written evidence on the UK-EU agreement and other trade deals and will issue regular recommendations for improvements and for future trade deals off the back of this evidence. The Commission plans to hear evidence every two weeks until December, and it will then produce a report identifying areas for UK action or negotiation with the EU.
The first evidence session on the economic impact of the Brexit deal is taking place this morning at 10:30am and a second session later this month will focus on food checks between Great Britain and Northern Ireland.
13 Apr 2021
European Commission against UK joining Lugano Convention
The European Commission is reportedly not supportive of the UK joining the Lugano Convention on the basis that it is not a member of the European Economic Area or the European Free Trade Association. For those in the legal profession, this will prove disappointing.
The Lugano Convention stopped applying to the UK following its withdrawal from the EU at 23:00 on 31 December 2020, except to proceedings already within the court system. Instead, the UK has fallen back on common law principles and private international law.
The UK applied to join the Lugano Convention last April which was initially supported by the EFTA states (Iceland, Norway and Switzerland). Ultimately the decision will be decided by all signatory states but so far, it doesn’t bode well for the UK.
29 Mar 2021
Welcomed agreement on Memorandum of Understanding
The UK and the EU are on course to agree a financial services Memorandum of Understanding (MoU) by the end of March. The UK said in a statement that “technical discussions” on the text of the memorandum “have now been concluded”. The text of the post-Brexit framework for financial services is now awaited.
The MoU sets out a framework for regulatory cooperation and a joint forum for discussing rules and procedures, as well as the sharing of information. However, the MoU is separate from any decision on equivalence and is unlikely to include legally binding arrangements on access to EU markets.
In light of tension between the EU and UK over vaccines and the trading arrangements for Northern Ireland, the agreed MoU provides a welcome piece of collaboration.
26 Mar 2021
Government overturns House of Lords: post-Brexit Trade Bill
The Trade Bill has passed its parliamentary stages and is set to become law. Despite support among Conservative backbenchers, the UK Government overturned the House of Lords’ so-called “genocide amendment” – which would have blocked trade deals with any proposed signatory guilty of genocide. Instead, under the agreed amendment, a parliamentary committee will alert Ministers to “credible reports” of widespread abuses. While no country was named, the vote came after foreign secretary Dominic Raab announced that the UK, US and EU have imposed sanctions on Chinese officials deemed to be responsible for human rights abuses in Xinjiang.
24 Mar 2021
EU takes legal action against UK over Brexit breach
The European Commission has formally taken legal action against the UK for breaching the Northern Ireland Protocol, saying the UK acted “in breach of the mutual trust and spirit of cooperation that [we] managed to rebuild in the last months of 2020”.
This action follows the UK’s decision earlier this month to unilaterally extend the grace period for border checks between Northern Ireland and the British mainland. The UK said the decision remains “lawful and part of a progressive and good faith implementation of the Northern Ireland Protocol.” The European Commission has described the move as a “serious” violation of the agreement. The UK is due to respond by 15 April.
This adds to the building tension between the UK and EU over vaccine exports, with European Commission President Ursula von der Leyen warning that the EU would review whether "exports to countries who have higher vaccination rates is still proportionate" adding “this is about making sure that Europe gets its fair share.” In response, Foreign Secretary Dominic Raab accused the European Commission of the kind of brinkmanship associated with undemocratic countries after it threatened to block the export of vaccines to the UK.
31 Dec 2020
End of an era: the European Union (Future Relationship) Act, applicable from 11pm
The EU (Future Relationship) Bill has completed all of its Parliamentary stages and has received Royal Assent to be signed into law. The UK-EU post-Brexit transition period will therefore come to an end at 11pm (midnight Brussels time) tonight.
The UK and the EU have officially signed the treaty on the future trading relationship. This will come into effect at 11pm tonight also, heralding the following changes:
- Existing EU international treaties will cease to apply to the UK.
- The EU system of free movement of people will end in the UK.
- The European Court of Justice will cease to have direct legal jurisdiction in Great Britain (but will still have a role in Northern Ireland).
In addition, there will be new border checks on goods travelling between Great Britain and the EU and new arrangements to govern trading between Great Britain and Northern Ireland. No doubt the impacts of these changes will be felt by insurers and businesses alike in the coming months.
30 Dec 2020
House of Commons backs post-Brexit trade deal
The European Union (Future Relationship) Bill – to enshrine the UK-EU post-Brexit agreement into UK domestic law - has today been approved by the House of Commons.
MPs, recalled from their Christmas recess, have backed the government's post-Brexit trade deal with the EU by 521 votes to 73.
The Bill - which does not cover financial services equivalence or data protection adequacy, but does facilitate new forums for regulatory discussion and co-operation - will now be scrutinised by the House of Lords, with the process expected to be completed tonight, allowing time for the Bill to receive Royal Assent and be signed into law by the end of the year.
24 Dec 2020
Brexit: UK and EU reach an agreement
After months of tense negotiations between the UK and EU, a post-Brexit deal has been announced. The UK Government has stated "we have taken back control of our money, borders, laws, trade and our fishing waters." The European Commission President Ursula von der Leyen has stated that it is a "good, fair and balanced deal".
22 Dec 2020
Deal or no-deal: Brexit countdown
UK and EU negotiators are running out of time. The main sticking point appears to still be over fishing rights. However, reports suggest that there has been movement to narrow the gap on quotas and transition, with the UK reportedly lowering its demand for 60% reduction in catch value to a 35% reduction, accompanied by a five-year phase-in period for the new arrangements - up from the initial offer of three years. The EU has reportedly rejected this offer, demanding a 25% reduction.
The European Parliament has said it cannot ratify a deal before the end of the transition period because there is insufficient time. If there is not enough time to even provisionally apply any deal, then there may be some form of technical work around to allow time for ratification and avoid no-deal disruption. It remains to be seen what form this would take.
UK ratification would be the matter of an emergency sitting of Parliament. However, with London in a tier 4 lockdown, the logistics of recalling MPs might be problematic. It is likely that there will be discussion of remote voting/proceedings in the coming days.
With only nine days to go and with both the UK and EU saying they will continue to talk until the last possible moment, any prediction on the chances of No Deal is difficult to make.
14 Dec 2020
UK and EU agree to extend negotiations
On Sunday, Boris Johnson and Ursula von der Leyen agreed to extend negotiations. The Prime Minster said “we had a useful phone call this morning. We discussed the major unresolved topics. Our negotiating teams have been working day and night over recent days.”
Michel Barnier has resumed talks with his UK counterpart Lord Frost, after briefing ambassadors of EU member states. It has been reported that Mr Barnier told ambassadors and MEPS that a post-Brexit trade and security deal could be sealed as early as this week. However, fishing is still an issue of contention with Mr Barnier tweeting today: "fair competition, and a sustainable solution for our fishermen and women, are key to reaching a deal.”
If the EU and UK provisionally agree a deal now, there would be a significant amount of legal and administrative work to be undertaken. The text would still need to be translated into 23 languages and signed off by the Council before it could be applied provisionally. Mr Barnier has therefore stressed that if a deal is reached before the end of the transition period, it is likely that there will be a short no-deal period in January.
The key question now seems to be, if a deal is to be agreed before 31 December, who will compromise on what to get there?
10 Dec 2020
Brussels publishes draft no-deal contingency measures
Boris Johnson returned to the UK from Brussels last night, having failed to reach a deal with the EU. Today the European Commission published its draft no-deal contingency measures in the absence of an agreement on a future partnership with the UK. These measures include temporarily ensuring that airlines can continue to fly their normal routes between the EU and UK and that hauliers can continue to cross the English Channel. Brussels is also proposing that the EU and UK should provide fishermen a grace period of one year, or until an agreement has been reached with the UK (whichever is sooner), to continue accessing each other’s waters.
Many of these measures require agreement from the UK, as they are reliant on reciprocal measures being introduced by both sides. The UK Government has yet to respond to the EU’s announced contingency plans and should the UK refuse to agree to some of these mutual measures, it will likely increase the immediate disruptive effects of a no-deal outcome at the end of the year.
Time is running out and there is now significant uncertainty whether a deal will be in place on 1 January 2021.
8 Dec 2020
UK and EU reach deal on Northern Ireland border checks
This afternoon the EU-UK Joint Committee announced that there has been an “agreement in principle on all issues” and in particular with regard to the Protocol on Ireland and Northern Ireland, relating to the implementation of the Withdrawal Agreement.
Michael Gove said he was “delighted” and thanked Maroš Šefčovič for his teams “constructive and pragmatic approach”. The UK Government has confirmed it will now withdraw the controversial clauses in the Internal Market Bill and similar clauses will not be included in the Taxation Bill.
When the UK leaves the transition period on 31 December, Northern Ireland will be the only land border between the UK and the EU. Both sides have agreed on the EU’s presence in Northern Ireland in relation to checks and controls on goods, as well as on border control posts for checks on goods. There is now agreement on how goods travelling from Great Britain to Northern Ireland will be treated regardless of a Brexit deal being struck.
7 Dec 2020
Brexit negotiations move to Brussels
Over the weekend ongoing talks between EU and UK negotiators did not result in a Brexit deal. It has been confirmed that the Commission President Ursula von der Leyen and Prime Minister Boris Johnson will meet in Brussels in an attempt to reach an agreement. In a joint statement this evening, they said “significant differences” remained on “three critical issues: level playing field, governance and fisheries”.
This week the Government plans to progress two pieces of controversial legislation – the Internal Market Bill and Taxation (Post-Transition Period) Bill, both of which diverge from the Brexit Withdrawal Agreement. Whilst the UK insists these measures are needed as a ‘safety net’ in the event that Brexit talks fail, Brussels view these as a test of good faith in negotiations. The Government announced that it would be prepared to remove the controversial Brexit clauses from the Internal Market Bill if solutions in relation to free flow of trade with Northern Ireland were agreed.
Michael Gove is in Brussels this week to meet with Maroš Šefčovič as part of the UK-EU Joint Committee to discuss the implementation of the Withdrawal Agreement, including the Protocol on Ireland and Northern Ireland. The talks will provide both sides an opportunity to discuss the Internal Market Bill and Taxation (Post-Transition Period) Bill.
30 Nov 2020
Fishing rights: still a ‘bone of contention’
With 32 days remaining before the end of the transition period, both the UK and EU remain optimistic about reaching a deal. Writing on Twitter, the UK’s Chief Negotiator Lord Frost said on Friday that “it is late, but a deal is still possible, and I will continue to talk until it’s clear that it isn’t”.
The last issues in dispute appear to be fishing, ‘level playing field’ provisions and governance. It was reported last week that the EU Chief Negotiator informed European Fisheries Ministers that the EU would be prepared to return between 15% and 18% of the fish quota caught in UK waters by EU fleets – an offer that was dismissed again at the weekend by the UK Foreign Secretary who urged Brussels to recognise the “point of principle” on Britain’s control of its waters.
On other outstanding issues, the UK Foreign Secretary said on Sunday that “it feels like there's progress towards greater respect” for the UK's position on ‘level playing field’ commitments - a set of post-Brexit common rules and standards.
26 Nov 2020
Ratification of a Brexit deal: a political process
If a deal is secured this week, focus will turn to ratification. If a political agreement is struck between the UK and EU, it is likely that parliamentary process will be adapted on both sides in order to ratify the agreement by the end of December.
The process for UK ratification is less rigorous than the EU's. Cabinet Office officials will draft the primary legislation required to implement a deal in domestic law, with plans to accelerate its passage through Parliament. Ordinarily, under the Constitutional Reform and Governance Act 2010, a treaty must be laid before Parliament for 21 sitting days before ratification can take place. However, the Government may seek to disapply or shorten the requirements if necessary.
The European Parliament believes the legal and translation processes required for ratification will take around three weeks. While the final plenary session is scheduled for the week commencing 14 December, the Commission told ambassadors that an extra session is "unavoidable". It has been suggested that this could be scheduled as late as 28 December.
Although both the UK and EU appear to remain hopeful that a deal will be reached, time is tight for both parliaments to ratify any agreement.
23 Nov 2020
State of play: UK-EU negotiations
With only five weeks to go until the end of the transition period, the deadline for both the UK and EU parliaments to agree and approve a deal is fast approaching. Although progress has been made, there are some clear sticking points in negotiations.
Over the weekend, the Chancellor said the UK would “not accept a deal at any price”. On Sunday, the UK’s chief negotiator said there had been “some progress" but warned talks “may not succeed". It is clear that high-level political intervention is likely required to deal with the remaining points in dispute. A call between the Prime Minister and Commission President is expected this week which may assist in tackling these contentious issues.
Overall, most members of the Cabinet are said to be urging the Prime Minister to agree to a deal, even if this means making some compromises. If a deal is reached this week, the focus will turn to ratification before the end of December.
10 Nov 2020
Internal Market Bill: awaiting ‘ping pong’
Yesterday, the House of Lords debated Part 5 of the Internal Market Bill on the Northern Ireland Protocol as part of its final day of Committee Stage. The Government faced two sizeable defeats on clauses which seek to disapply parts of the Protocol agreed to within the Withdrawal Agreement. Those defeats included, in particular, ensuring unfettered access to the internal market of Great Britain for Northern Ireland businesses, and disapplying or modifying the protocol in relation to exit summary declarations and EU state aid rules in Northern Ireland.
The Government has committed to re-tabling the removed clauses when the Bill returns to the House of Commons for ‘ping pong’ expected in December. Given its large majority in the Commons these clauses are likely to be reinserted. However, this time period also provides the Government opportunity to reconsider this position once it knows the outcome of Brexit negotiations.
If the Government were to reinsert the removed clauses and seek to pass the Bill the House of Lords holds the power to delay the Bill for up to a year if it chooses to do so. The Bill will receive its Report Stage in the House of Lords on 18, 23 and 25 November with it likely to return to the Commons in December for its ‘ping pong’ stage.
5 Nov 2020
Reaching agreement: COVID-19 and US elections feed into the dynamic
Following two weeks of intensive ‘media blackout tunnel’ talks between the UK and EU, talks will take a short pause before continuing in London next week. There has been no substantial movement on the contentious issues of fishing access, level playing field and governance. Commentary suggests that the external political pressures of COVID-19 and the US elections are impacting on the UK negotiating position.
On COVID-19, Boris Johnson’s decision to re-enter a national lockdown has strained relations with influential backbench MPs, many of whom are key Brexit supporters. The Government faced an outright rebellion of 39 MPs voting against the lockdown, significantly eating into its majority. Concessions at this point risk stoking this fire among the backbenches while also highlighting that Johnson may have to rely on Labour votes to get a Brexit deal through Parliament.
On the US elections, speculation suggests that the UK was awaiting the outcome before making any significant moves in EU negotiations; the rationale being that a Biden victory would increase pressure on the UK to make concessions given his antipathy towards Brexit, the UK's approach to the Internal Market Bill, and alleged lack of enthusiasm for a future UK-US trade deal.
It is becoming increasingly clear that without high-level political intervention that unlocks the ability of the negotiators to find compromises, talks will not make any progress on these points. This underlines our view that substantial movement will come late in the day, probably brokered at the highest political level, if it comes at all.
12 Oct 2020
Reaching a UK-EU deal: re-casting the fishing rod
Weekend developments confirmed that a significant gap remains between the two sides on fisheries. Once again, Mr Johnson stated his willingness to "explore every avenue" for a Free Trade Agreement. Positively, the two sides are near an agreement to include the Paris Agreement climate targets in the FTA.
Looking to the week ahead, European leaders will meet at the European Council Summit to try to find political agreement on the key remaining political issues i.e. fisheries, level playing field, and governance arrangements. Despite the 15 October deadline to find a deal, a final deal is not expected this week and the EU has talked down any such prospect. It is, however, a crucial opportunity to tackle areas of ongoing disagreement and where input from heads of government will be necessary to unlock compromises. Johnson will want to see that a deal is in sight by the end of a Summit, with a commitment to nail down the details in intensive talks.
While there are still major gaps between the sides, they have narrowed markedly in recent weeks. The UK has moved away from its hard-line position on the level playing field. The UK and France are now presenting fishing access as the main area of disagreement. Governance and dispute resolution has also taken on a renewed significance following the Internal Market Bill controversy but so long as a solution does not involve the European Court of Justice directly, it should be soluble. For the UK, control of its fishing waters is a matter of sovereignty. Equally, France is threatening to block any deal on fish that it is not satisfied with. This is obviously the issue that will drive most of the theatrics in the coming week.
6 Oct 2020
UK and EU agree to intensify Brexit negotiations
Despite a tumultuous few weeks, it appears that the political will to get a deal over the line and avoid a no deal exit at the end of the transition period on 31 December 2020 still exists.
On Saturday 3 October, Commission President Ursula von der Leyen and Prime Minister Boris Johnson held a call, agreeing to intensify negotiations ahead of the European Council Summit on 15 October. This has been seen as a substantive step forward, with reports suggesting both sides ended the call confident that a deal is possible. As such, talks will take place between the two on a "regular basis".
However, the key sticking points remain: fisheries, 'level-playing-field' conditions and governance arrangements. Significant gaps remain on those issues, with little evidence of serious movement since their last meeting in June. Indeed, since the introduction of the Internal Markets Bill, the EU has increased its focus on governance and dispute resolution. At the end of the latest round of negotiations, Barnier stated that this has become ‘naturally even more important’.
In today’s key note speech at the (virtual) Conservative Party Conference, Johnson gave little indication of the direction of travel in the negotiations, but instead reiterated the benefits of the Brexit, stating how it offered not just opportunities in free trade and free ports, but also opportunities to do things differently and better than the EU, such as innovation in tech and data and finance.
Overall, the public noises are encouraging. However, it is likely to be a bumpy ride on the way to any deal. If concessions do not appear from both sides, or if they are viewed as insufficient, negotiations could yet be derailed. But cautious optimism is a fair analysis of where we currently stand, and the outlines of a deal are becoming visible.
1 Oct 2020
Internal Market Bill: start of infringement process against the UK
A few thoughts regarding the European Commission’s formal notice to UK for breaching its obligations under the Withdrawal Agreement. The EU starting the process is a procedural step - the letter in itself does not establish that the UK has broken the law. Rather, it sets out that the EU’s belief that the provisions on the Protocol on Northern Ireland contained within the Bill represent a breach of the UK’s obligation to act in good faith, as set out in Article 5 of the Withdrawal Agreement. The EU has also launched a process, which – if the Bill is adopted – would impede the implementation of the Withdrawal Agreement.
This is the first step in the legal mechanism being used. The mechanism contains a number of further pre-ligation stages and can also relatively easily be stopped. Overall this is, for now, the EU ratcheting up political pressure. The EU has for the time being not walked away from FTA talks and following tomorrow’s announcement on how discussions have proceeded it should become much clearer if we are on the path to a deal.
The UK has until the end of October to submit its observations to the letter of formal notice, which aligns with the EU’s self-imposed 31 October deadline for the FTA to be finalised. If a deal is reached the need for continuing legal proceedings falls away. If however no deal is reached and the UK implements the Bill, then the EU will likely move forward with arbitration or legal action through the provisions in Withdrawal Agreement.
9 Sep 2020
Internal Market Bill published: trade talks and the future of the Union at stake?
The UK Government has published the Internal Market Bill, which is designed to protect trade across the UK after the transition period ends on 31 December 2020 and reflect the transfer of powers from the EU to the UK Government. Alongside provisions on Northern Ireland, the Bill also contains measures on the future operation of the devolution settlement in the UK. Indeed, the Bill is widely seen as one of the most substantial changes to the devolved settlement since it was established over twenty years ago.
The purpose of the Bill is to ensure that, as the UK ceases participation in the EU Single Market and Customs Union at the end of the implementation period, a seamless internal market between England, Scotland and Wales can continue, based on ‘mutual recognition’ of goods and services. The Bill also seeks to guarantee ‘unfettered access’ between Northern Ireland and Great Britain, as part of the Northern Ireland Protocol of the UK-EU Withdrawal Agreement. That provision has prompted concerns in the EU that the UK is seeking to change some of the provisions in the divorce agreement signed in January, and thereby undermine trade talks.
The issue of creating a post-Brexit “common framework” for the UK – including a defined internal market – has, of course, been a contentious issue throughout the Brexit process. This is because several devolved administrations, most notably in Scotland, have argued that such proposals by the UK Government would undermine the current devolution settlement, which was established when the UK was an EU member. Overall, while the Government intends to pass the Bill before the UK exits the Brexit transition period, the reactions so far – both domestically and beyond - indicate that the passage of the Bill is unlikely to be plain sailing. Indeed, both Welsh and Scottish administrations are likely to refuse to consent to the Bill unless compromises are struck with regard to any proposed reduction in devolved competences. Alongside needing to field heat from the EU, the Bill is likely to become the latest focus of the disconnect between Westminster and devolved governments.
5 Mar 2020
Budget 2020: a milestone towards Brexit
Chancellor Rishi Sunak MP has confirmed that the Budget will take place on 11 March. Sunak has promised that his first Budget will deliver on promises made to the British people in the General Election, “levelling up and unleashing the country’s potential.” There is no doubt that the Budget will be the first explication of the Government’s domestic policy – containing measures that have the potential to re-shape and reflect the post-Brexit country that Johnson envisages; one that sees the UK thriving on its own terms.
Looking forward, business or commercial representations will need to be seen through a new political lens, requiring business to accept the potential shift away from the status quo. Talking about the human impact of change (in positive terms) is where business will gain traction with attempts to influence policy making. Business will need to show that it understands what needs to happen for the country and is aligned around that agenda. In turn, decision making seems increasingly political rather than business focused – decisions will be made through the lens of helping win the next general election and how they will aide Britain’s post-Brexit future.
4 Feb 2020
Voices for free trade: where will we end up?
Yesterday, Boris Johnson set out his view on the future trading relationship with the EU, the negotiations for which will begin in March. Johnson said that he wants a “thriving trade and economic relationship with the EU” and that the UK will pursue full “legal autonomy” so it can be an independent actor and a catalyst for free trade across the world. Meanwhile, The EU’s chief negotiator, Michel Barnier, outlined the draft EU position and made clear that while the EU wants an ambitious partnership, the UK’s position will be less favourable than when it was a member of the EU.
We are of course at the start of this 11 month process and neither side can be expected to reveal their hand quite yet. Both sides are playing to different audiences but the positive news is that both share a desired end point – a free trade agreement that is, in Barnier’s word, “best in class”.
On financial services, as it stands, there will be no mutual recognition of rules and financial services firms will lose their passporting rights. Additionally, all imports of goods or services will need to comply with EU rules and goods will be subject to regulatory checks. The direction here is very much up to the UK’s chosen direction i.e. to converge or diverge from EU rules. Financial services will not be included in the FTA but may be considered alongside any trade deal as the sector is relevant for future EU-UK relationship. Equivalence will be granted through unilateral decisions made by the EU and assessment will begin immediately. It is important to note that the EU’s language around financial services in the draft mandate is non-binding and does not make any formal commitments.
Whilst business may be about to take another deep breath around further issues of uncertainty, we will soon find out the detail of key sticking points and just how entrenched position are on both sides. For now, it’s perhaps important to remember we are only at week one.
13 Dec 2019
A new political geography
Boris Johnson has won a majority at the General Election, a result which would have been at the very top end of his party’s expectations. It appears that the Pavlovian repetition of pledges - including Johnson’s ‘get Brexit done’ message – has been an effective communications strategy and cut through to many parts of the country.
Parliament will have a radically different feel and we will see the biggest turnover of MPs since 1997, which will require a huge amount of work in understanding where the new MPs pressure points are. Johnson will need to deliver (and fairly quickly) the promised ‘one nation’ infrastructure around the NHS, crime and schools, as well as ensure a smooth Brexit. He will also need to consider the impact of his party’s success amongst the former Labour electorate. How will he need to pivot policies towards them to keep hold of them?
All roads of course lead to Brexit. What will our trade agreement be? And will we reach a deal by the end of 2020? Michel Barnier has already hinted that a deal in that timeframe is unlikely and January 2020 could, therefore, see more fireworks. Businesses will also be alive to the possibility that the UK could face another cliff edge with regard to transitional arrangements at the end of 2020, with the focus shifting to the domestic agenda in interim. Meanwhile, we can expect a busy start to 2020, with a raft of legislative and non-legislative measures designed to cover about every aspect of government activity. As always, it will be interesting to see the interplay between the demands of running a country and the promise of constitutional reform.
30 Oct 2019
Boris Johnson finally has his election
Last night legislation for an early General Election passed through the House of Commons and MPs are now preparing themselves for a 12 December poll. The Bill for an early election is expected to pass without any issue and receive Royal Assent, with Parliament likely to be dissolved from Wednesday 6 November.
After three failed attempts to call an election, Johnson had to bypass the Fixed Term Parliaments Act (FTPA) through a one page Bill that effectively bounced the Labour Party into supporting a General Election. Johnson will now have the opportunity to trail his 'People versus the Politicians' narrative and focus on three domestic issues which have been familiar soundbites since he came into power - the NHS, education and crime.
For Labour, while the leadership are confident of their chances, there are reportedly misgivings in the Shadow Cabinet about the timings. Labour’s election narrative will likely focus on repositioning Brexit as a “once in a generation chance” for change and on issues such as austerity, climate change and the NHS, where they believe they have an advantage over the Conservatives. Assuming the Lords pass the Bill as anticipated, individual MPs will now make clear over the next week whether they intend to re-stand as the MP for their constituency. Countdown will then begin to polling day on 12 December.
14 Oct 2019
Queen's Speech sets out Government's priorities
In a week that is likely to be dominated by ongoing Brexit negotiations and timelines, we have today been provided with this Government’s priorities and legislative programme in the Queen’s Speech which took place this morning.
The content was largely as we expected; other than bringing in the requisite Brexit Bills, its second biggest objective was delivering on top-line General Election priorities.
The Government has announced it intends to introduce 26 Bills over the course of this Parliamentary session.
The heart of the legislative programme is Brexit, with the Government intending to bring forward a Financial Services Bill, Trade Bill, and Private International Law Bill. There were also substantial announcements on civil justice related Bills.
There will be now be up to six days of debate over different elements of the Speech in the House of Commons, after which MPs will vote on it. With a lack of a Parliamentary majority, the Government faces a difficult task in securing the necessary votes to pass it.
Losing a vote on the Queen’s Speech will not automatically trigger a General Election, but it adds further pressure on both sides of the House to support one.
6 Sep 2019
Anti no-deal legislation looks set to pass
Yesterday evening, the EU (Withdrawal) (No.6) Bill (or 'Benn Bill') passed its Second Reading in the House of Lords. As expected, the Bill has not yet faced fierce competition in the Lords, following the Government’s decision not to impede its process, and the Bill is expected to pass Lords remaining stages today. The Bill will then be sent back to the Commons for Consideration of Lords Amendments (if necessary) before receiving Royal Assent. Elsewhere, opposition MPs are holding a conference call this morning to discuss tactics on General Election timing. Looking to next week, the Government will have a second attempt to table another Motion calling for an Early Parliamentary General Election – to be debated on Monday evening. Opposition Parties appear reluctant to support a General Election until the legislation to prevent no deal is secured in law and the threat of no deal is removed, meaning the Motion is not expected to pass.
The crucial events next week will likely centre on any tactics deployed by Number 10 to dampen Opposition Parties’ progress and the channels the Government can pursue to ensure the UK leaves the EU on 31 October “do or die”.
There are a number of tactics Number 10 could pursue next week, but no clear path as to the most effective and/or the most likely to achieve a majority. These include (i) a GE motion that succeeds in calling a General Election on 15 October (ii) amending the Fixed Terms Parliament Act and suspending Parliament’s five year term, triggering a General Election or (iii) the Government passing a Vote of No Confidence in itself, leading to paralysis of Parliament and forcing MPs to hold a General Election. Of course, any of these tactics may not be deployed or could fail if they are. What does seem certain (for now) is that the Conservative Government will look to pursue a General Election before 31 October and that, given how volatile the landscape is, the timing of a General Election is crucial.
Returning to the day ahead, the High Court in London is also expected to rule on the judicial review application, brought forward by anti-Brexit campaigner Gina Miller, on whether the decision to prorogue Parliament was an ‘unlawful abuse of power’. Whilst that may draw the week to a close, the sparks look set to continue next week.
2 Sep 2019
Return of parliament: collision course awaits
Parliament returns from its summer recess tomorrow, and events this week and early next week will be critical to the direction of travel over Brexit, as well as the possibility of an early general election. Expect backbench MPs to make their move in an attempt to block a no-deal exit from the EU on 31 October, putting parliament and government on collision course.
There are now over 20 Conservative MPs prepared to defy the government and risk losing the Conservative Whip in order to block a no-deal Brexit, by introducing an anti no-deal Bill, which they will seek to rush through. If the anti no-dealers are successful in the Commons, there will be a sustained effort to ‘talk out’ the Bill in the House of Lords. If Brexiteers in the Lords manage to filibuster the Bill by keeping it tied up until next Monday (9 September), parliament will be prorogued and the Bill will fail.
Looking to tomorrow, opposition MPs are expected to table an application for an emergency debate, designed to take control of the Commons’ agenda.
Given that backbench MPs have been in discussions with the Speaker John Bercow over the plans, it is likely that the vote will pass, paving the way for backbenchers to introduce legislation on Wednesday. MPs will first vote on a business motion to allow them to pass all stages of the Bill in one day. They will then debate and vote on all stages of the Bill throughout the course of Wednesday.
The Bill will then move to the Lords on Thursday and its passage there will be less predictable. A handful of Peers could obstruct the Bill: speaking at length to delay the Bill to try to prevent its successful passage into law. The Commons is not currently scheduled to sit on Friday, however the Lords are due to be debating private members’ bills, and time could be reallocated to continue the debate on this legislation. If the Lords amend the Bill, MPs will then need to deal with the amendments in ping-pong, possibly on Monday 9 September if the Bill has passed its Lords parliamentary stages by this point.
By comparison, the Cooper-Letwin Bill (designed to facilitate an extension of Article 50) was obstructed in the Lords but eventually passed in April because the government agreed to cooperate, as it had already decided to seek an extension to Article 50 anyway. This time round, however, the government is set to refuse to cooperate, which means it could considerably slow the passage of the Bill. To be successful, any legislation will need to be passed before prorogation, otherwise MPs would need to start the process all over again once the new parliamentary session begins. Whilst at this stage the main risk for the Bill is delay as it passes through the House of Lords, all events and speculation remain subject to change as the events from the week unfold.
5 Aug 2019
Preparing for no deal: ramping up the pressure
At the start of his premiership, Boris Johnson appointed a Cabinet and team of Downing Street advisers who are resolutely committed to leaving the EU on 31 October – irrespective of whether a new Brexit deal is achievable by then. Given the steadfast commitment to leaving the EU without further delay by Halloween, the business community is now considering the extent to which a no deal outcome is possible. There can be little doubt that the likelihood of leaving without a deal has increased since Boris Johnson succeeded Theresa May.
In the new government’s first weeks, Downing Street, the Cabinet and HM Treasury have sought to prove their commitment to the 31 October deadline by significantly ramping up the preparation for a no deal exit:
- Three new Brexit ‘War Cabinets’ have been created that will be meeting over parliament’s summer recess.
- £100 million has been allocated for a new public-information campaign to help prepare businesses for no deal.
- Chancellor of the Exchequer, Sajid Javid has doubled Brexit funding for this year, announcing £2.1 billion to prepare for no deal.
- A new immediate cash boost of £1.1billion has been allocated to prepare ‘critical areas’ for the exit date.
- A further £1 billion available to enhance operational preparedness this year if needed.
Domestically, the UK is seeking to signal to the EU that it is willing to pursue no deal if negotiations over the Irish backstop do not progress. In response, the EU have reiterated their longstanding position that the Withdrawal Agreement cannot be re-opened and that the backstop is an integral part of the existing agreement. There is currently no sign that suggests the UK or EU are willing to back down.
In a clear departure from Theresa May’s strategy, Downing Street is spending money and time convincing Brussels that Britain will be ready and willing to leave without a deal on 31 October. Given the economic impact for both sides, it is a deeply risky manoeuvre.
Should the government move from no deal preparation to a position of backing no deal outright, we can expect Parliament to seek to take back control when the House of Commons returns from its summer recess on 3 September.
Overall, there is no sign that the certainty business has been desperately seeking will materialise any time soon.
30 Jul 2019
A new Prime Minister: where next?
As new prime minister, Boris Johnson, embarks on a tour of the UK as parliament departs for recess, it is apparent that his geographical presence is being complemented by a considerable online effort with a number of campaigns across social media. Targets include labour-leave and high Brexit-vote areas, which should come as no surprise given the position of leading Leave campaigner, Dominic Cummings, within the Johnson No.10 team. The Prime Minister’s activity also suggests that the Conservatives may be positioning themselves to head to a general election in the autumn and take on Jeremy Corbyn sooner rather than later.
If Johnson were to win a snap election, it would give him a new parliament before the 31 October Brexit deadline and increase his chances of taking the UK out of the EU on time.
However, the strategy could back fire and in particular, Johnson is already experiencing challenges in Scotland. Parliament’s time is also very narrow. Should a general election come about, commentators are predicting a de-regulatory narrative will emerge and one that is pro-business, as indicated by a newly created Head of Business Relations into Johnson’s team. Whilst we are unlikely to see much if any legislation between now and 31 October, the window of time provides an opportunity for business to fill the inboxes of the No.10 team with new ideas.
Turning to Brexit, EU Brexit negotiator Michel Barnier has said that he was willing and able to negotiate only within the mandate set out by EU27 leaders. While the EU negotiating team stand ready to negotiate throughout August, the EU will likely wait for the new UK administration to set out its Brexit plans in more detail and engage more directly with Member States. Johnson’s first fixed date for meetings with EU leaders will be at the 24-26 August G7 Summit in France, but he may decide to have bilateral meetings earlier. Taken in the round, it is hard to say to what extent – if any – the EU is rattled by Johnson’s narrative. Overall, getting a deal before 31 October remains difficult.
25 Jun 2019
The State of the Nation: a new Prime Minister in waiting
As the Conservative Party leadership contest plays out before us, the political mood around the country appears to be worsening. Our politics is becoming more polarised as Brexit reshapes the traditional left/right party lines. It presents unique tests for political incumbents and new challengers alike. Labour and the Conservatives have both struggled to contain the divides driving a wedge between both their MPs and grass roots members, whilst the sharp rise and fall of Change UK/The Independent Group proves the difficulty of starting a political organisation from the top down.
Research by BritainThinks (an international insight and strategy consultancy) shows a national mood that is pessimistic when thinking about the UK as a whole. 65% of the public is pessimistic about the Brexit outcome – including 50% of Leavers – but only 58% think it likely the UK will leave the EU in the next year. Outlining the clear challenge that the next Prime Minister will face, 72% of the public think it is very or fairly likely the UK will become more divided in the next 12 months.
11 Apr 2019
An opportunity for applying wisdom?
Following an emergency Council Summit last night, EU leaders have agreed a further Article 50 extension with an end date no later than 31 October 2019. This latest extension is intended to be ‘flexible’, meaning the UK could leave the EU before 31 October if Theresa May can find agreement from Parliament on her Brexit deal sooner. Under the terms of this new extension, the UK must also commit to holding European elections on 23 May (unless Theresa May can find agreement on a Brexit deal before then). Failure to hold these elections would result in this latest extension ending at the point of its next ‘review’ on 1 June 2019.
Although many Member States, including Germany, were eager for the UK to be granted a much longer extension, France’s protest to such a delay and demands for the ‘shortest possible extension’, meant EU leaders were forced to find a ‘mid-way’ compromise. In the end, a six month extension to 31 October was deemed to give the UK enough time to find a domestic resolution, while also reducing the ability of the UK to impede EU business by ensuring it does not participate in the new EU Commission, which is expected to take office on 1 November.
Reactions so far have been far-reaching. However, a common theme prevails - the UK must use this time wisely and consider the new extension as an important mark in the sand to achieve meaningful cross-party collaboration.
Theresa May will now return to Parliament to give a statement to MPs this afternoon on the extension agreement. From a procedural point of view, the Government will also now lay a Negative Statutory Instrument to change the UK’s exit date to 31 October. In the more medium term, the extension could prove unhelpful for Theresa May as it limits her options to break the current impasse in Parliament. In reality, the period is long enough that the UK will likely need to participate in EU elections but not so long that there is time for a genuine attempt at a second referendum, which may be a condition of the current Government/Labour talks on a new way forward.
It remains to be seen if/when the Government will attempt to bring a Brexit deal back to Parliament in an attempt to find agreement. A general election may still yet prove the only viable option to break the impasse in Parliament. Meanwhile, it is now unlikely the Government will bring forward any substantive legislative programme, in the form of a Queen’s Speech, ahead of any Brexit deal – which reinforces the importance of breaking the impasse to allow other priorities to receive Parliamentary oxygen and move the UK forwards.
5 Apr 2019
May requests Article 50 extension to 30 June
This morning the Prime Minister Theresa May has written to European Council President Donald Tusk to inform him that the Government will be asking for a further extension to the Article 50 process until 30 June.
The Prime Minister has used her letter this morning to update President Tusk on her discussions with Labour Leader, Jeremy Corbyn to find a proposal on the future relationship they can both agree on without reopening the Withdrawal Agreement. She also said that:
If the talks do not lead to a single unified approach soon, the Government would instead look to establish consensus on a small number of clear options on the future relationship that could be put to the House [of Commons] in a series of votes to determine which course to pursue.
This confirms the commitment made by the Prime Minister in the statement earlier this week to hold further indicative votes in the Commons if no agreement can be reached with Labour.
Given this further extension means UK would remain an EU member during the period of EU elections, the Prime Minister also announced that the Government is preparing for such elections. However, should Parliament ratify the Government's deal between now and the date of EU election polls - 22 May - then the UK would seek to cancel EU elections. Therefore, if the Government can get its deal passed through Parliament along with all the necessary supplementary legislation, the UK would intend to leave the EU before the new final exit day - 30 June.
4 Apr 2019
Cooper Bill approved by House of Commons
On Wednesday evening, the European Union (Withdrawal) (No. 5) Bill - known as the 'Cooper Bill' = was approved by the House of Commons by 313 votes to 312. It will now be debated in the House of Lords.
What does the Bill do?
The Cooper Bill aims to prevent a no-deal Brexit by requiring Theresa May to ask the EU for an extension of Article 50. It also provides a mechanism by which Parliament would be able to control the extension date.
It does so by legislating firstly to require the Prime Minister to bring forward a motion to the Commons the day after the Bill passes, which seeks an extension of Article 50 of any length she chooses. However, it allows MPs the opportunity to amend this date if it deems the Government's proposals insufficient.
What's next for the passage of the Bill?
The Bill will now progress to the Lords today (Thursday). Before the Bill can be considered by the Lords, they will need to pass a Business Motion. This has been tabled by the Labour Deputy Lords Leader Baroness Hayter, and seeks to set aside relevant Lords Standing Orders to try and allow the Bill to get through the House in one day. However, there are already seven amendments tabled to the Business Motion.
It is expected that there will be resistance from Eurosceptic peers in the form of filibustering as in the Lords, all amendments are debated, can be voted on and all peers can speak as long as they wish.
Peers can be silenced on a particular motion by the mechanism of voting that 'The Noble Lord no longer be heard', or the mechanism of forcing closure which itself requires a vote. Although contingent on the levels of resistance, the Lords scrutiny of the Bill could go into tomorrow morning and the Bill is unlikely to receive Royal Assent until at least Monday.
3 Apr 2019
Article 50 extension Business Motion and Bill text published
On Tuesday afternoon, a backbench Business Motion and the draft text for legislation ('Cooper Bill') ,which aims to force the Government to seek an extension of Article 50, was published. The text of the Business Motion can be read here and the draft Bill can be read here.
The Business Motion and Cooper Bill are Parliament's further attempts to take control of the Brexit process.
Today's session, which was originally intended for further 'indicative votes', will now be used to facilitate the attempted expedited passage of the Cooper Bill.
The Business Motion, laid by Conservative Sir Oliver Letwin MP, allows time for the Cooper Bill - 'the European Union (Withdrawal) (No.5) Bill' - to pass through all of its stages of Commons scrutiny today.
The Bill, written by Labour MP Yvette Cooper, if successful would require the Government to table a motion laying out its proposed date for an Article 50 extension. However, the Bill states that this motion will be amendable, thereby allowing MPs to further alter the date, should they be unhappy with the Government's proposal.
The Bill further compels Ministers to comply with the terms of the Article 50 motion, once passed (and possibly amended) by MPs.
The Business Motion can be debated until 5pm today. This will be followed by a vote. Assuming the Motion passed, MPs will then begin their scrutiny of Cooper's Bill. It is important to note that this Business Motion will be amendable, with MPs due to vote on amendments first, followed by a vote on the Business Motion itself.
Should the Commons pass the Cooper Bill today, it would then proceed to the Lords for further scrutiny.
To ensure that the Bill could proceed at the same rate in which it passed through the Commons, the Lords would likely have to also temporarily amend its Standing Orders to facilitate the Bill's swift passage before the European Council Summit on the 12 April.
Assuming the Cooper Bill passes both the Lords and Commons within this reduced timeframe, it will then proceed to have its Royal Assent in order to be signed into law. However, it is important to note that there is no guarantee that the Bill will be signed into law in time to allow the Commons to vote on an Article 50 extension proposal before the Emergency EU Council Summit on the 10 April.
2 Apr 2019
Indicative Vote Results
Yesterday, the House of Commons held the second round of indicative votes in a bid to test the opinion of MPs on a range of Brexit options. Despite expectations to the contrary, no motions secured an outright majority.
Sir Oliver Letwin's Business Motion - passed by MPs earlier on Monday - sets aside time for further debate on Wednesday 3 April.
Motion C (Clarke) - Customs Union: any agreement must include “as a minimum" a permanent UK-wide customs union with the EU. Aye: 273 No: 276
Motion D (Boles) - Common Market 2.0: Continued participation in the Single Market via EFTA and a comprehensive customs arrangement. Aye: 261 No: 282
Motion E (Kyle) - Confirmatory public vote: Parliament would not be able to ratify any Withdrawal Agreement and framework for the future relationship unless they have been approved in a public vote. Aye: 280 No: 292
Motion G (Cherry) - Parliamentary supremacy: Two days before Brexit, if there is no deal, Britain should ask the EU for an extension and revoke Article 50 as a last resort. Aye: 191 No: 292
Tuesday 2 April: Cabinet meets to discuss way forward following the results of indicative votes.
Wednesday 3 April: further debate and indicative votes on Brexit options.
1 Apr 2019
Commons votes to approve indicative votes round two and the Speaker selects motions to include
This afternoon the House of Commons voted to pass the Business Motion which authorises a second series of indicative votes this evening. Following this, the Speaker has selected four options for MP's to vote on as part of this process.
MPs approved the Business Motion by a vote of 322 to 277 allowing Parliament to run a series of indicative votes this evening and paving the way for another round of indicative votes on Wednesday 3 April. The motion was passed despite Government opposition.
The Speaker selected the following motions for debate and to be voted upon:
Motion C (Clarke): Customs union
Motion D (Boles): Common Market 2.0
Motion E (Kyle): Confirmatory public vote
Motion G (Cherry): Parliamentary supremacy
29 Mar 2019
House of Commons votes on the Withdrawal Agreement
Today, the House of Commons will vote on the Withdrawal Agreement, having separated it from the Political Declaration on the Future Relationship. Additionally, a further round of indicative votes is scheduled to take place on Monday 1 April.
If the Withdrawal Agreement is passed in today’s vote, it would meet the EU’s conditionality for extending Article 50 to Wednesday 22 May. The Government would then look to work with the House to approve the Political Declaration on the Future Relationship separately. If the Withdrawal Agreement passes, the Government is expected to introduce the Withdrawal Agreement Bill next week.
This is important because it has been suggested that the Government could use the passing of the Bill as a way of avoiding holding a third meaningful vote, which the Government appears unconfident of winning.
A number of amendments for today’s vote have also been published in the Order Paper. They include a call for the Prime Minister to bring forward the necessary legislation to revoke Article 50 (Macneil-Clarke); to increase the influence of the House of Commons over the subsequent negotiations on the future UK/EU relationship (Snell-Nandy) and to reject the Prime Ministers deal and no deal (SNP-Plaid Cymru).
Looking forward to next week, it is likely that another round of indicative votes will take place on Monday 1 April and regardless of whether the Withdrawal Agreement is approved (today) given that they predominately relate to the future relationship. The Business Motion follows that which was set out for Wednesday’s indicative votes so the process should be similar. However, given none of the proposals won a majority on Wednesday, it is likely that Sir Oliver Letwin will use the weekend to work out how the voting system might be altered in order to achieve a majority for one of the options. It should also be noted that the motion sets aside Wednesday 3 April as a potential further date in which Parliament takes control, leaving the possibility open for further indicative votes next week.
26 Mar 2019
Brexit: the week ahead - Parliament takes control
Last night witnessed an historic moment in Parliament’s history, as MPs voted for Sir Oliver Letwin’s amendment to “take control” of the Commons agenda by 329 votes to 302. Three Government Ministers defied a three-line whip, joining 30 other Conservative MPs, and effectively resigned.
The Government’s ‘Next Steps’ Brexit motion debated last night was in itself not particularly controversial. It was tabled due to a requirement in the Withdrawal Act as Meaningful Vote 2 was defeated on the 12 March. However, Letwin’s cross-party amendment sought to allow MPs to put forward business motions related to Brexit and effectively, take control of the Order Paper.
The amendment is significant in a number of ways. Procedurally, it is the first time backbench MPs have taken control of the Order Paper and there is now a potential for MPs to pass new laws which compel the Government to change their course of action. However, Theresa May made clear in her statement to MPs yesterday that the Government would not be bound by the result of any indicative votes.
The amendment is also significant as it has the potential to focus the minds of Brexiteers ahead of Meaningful Vote 3, which could take place as soon as Thursday this week.
Overall, the narrative may now shift to one where the probability of a soft Brexit has increased, whilst the probability of a no-deal Brexit has arguably decreased.
As MPs did not vote for a clear mechanism with which to conduct indicative votes, there is still some speculation over the way in which they will take place. We should understand the process more once the Business Motion is published today. Voting tomorrow will be less about securing a majority but more about discovering which propositions that have been put forward command support.
20 Mar 2019
Prime Minister Theresa May has written to EU Council President Donald Tusk requesting an extension of Article 50 until 30 June 2019. You can read the letter in full here.
However, there is currently speculation that the EU Commission believe that an extension to June 30 would be legally and politically difficult, and the main options they will propose are to extend Article 50 until before May 23 or alternatively, to the end of 2019 and require the UK to participate in EU Parliament elections.
- The letter states the UK Government policy remains to leave the EU in an orderly way, and on the basis of the Withdrawal Agreement agreed with the EU.
- May confirmed she had intended to bring the vote back to the House of Commons this week, but further to the Speaker stating the agreement would have to be “fundamentally different" for it to be brought back, this made it impossible to call a further vote in advance of the European Council. However, she argues it remains her intention to bring the deal back to the House.
- In advance of a new vote, May asks the European Council to approve supplementary documents that President Junker and May agreed in Strasbourg, putting the Government in a position to bring these agreements to the House and confirming the changes to the Government's proposition to Parliament. May states she also intends to bring forward further domestic proposals that confirm previous commitments to protect the UK's internal market given concerns about the backstop.
- May says she will put forward a motion in Parliament for a third vote “as soon as possible".
- The Prime Minister states that if this motion is passed, she is confident that Parliament will proceed to ratify the deal constructively, and requests an extension of Article 50 until 30 June 2019 to give enough time for Parliament to ratify the necessary legislation.
18 Mar 2019
The Speaker has made a statement to the House on the rules around a third Meaningful Vote.
Quoting Erskine May (the guide to parliamentary law and practice), John Bercow said that a motion or amendment that is the same in substance may not be brought forward again in the same session. Whether the second motion is substantially the same as the first is a matter for the judgement of the Chair.
He therefore said that if the Government wishes to bring forward a “new proposition", which is “neither the same nor substantially the same", this would be in order.
The Government cannot resubmit to the House the same proposition or the substantially same proposition as that which was rejected last week.
Bercow emphasised that this ruling is not his last word on the subject but was meant to indicate the test the Government must meet for him to rule that MV3 can be held this parliamentary session. However it appears to indicate that the Government cannot bring back exactly the same deal for MPs to vote on - rather there must be something judged to be 'substantially' different.
13 Mar 2019
The Government last night suffered another major defeat in the second Meaningful Vote on Theresa May’s Brexit deal, rejecting it by a vote of 391 to 242.
It was a narrower margin of defeat to January (432 to 202) but, given there are now only 16 days to go until the legally enshrined date of Brexit, the defeat throws the Government and the political process into a renewed sense of chaos.
The second defeat shows that Downing Street’s Brexit strategy of grinding down opposition in the Commons incrementally in the months leading up to 29 March has failed.
With this evening’s vote on no deal due to take place around 7pm, attention has now turned to the realistic prospects of exiting without a deal on 29 March or an extension.
Making the necessary preparation for a potential no deal, this morning the Government published the tariffs it will charge in a no deal situation on goods imported from the EU. No tariffs will apply at the Northern Ireland border except on plants or animal products coming from outside the EU. The regime would apply for up to 12 months while a full consultation and review on a permanent approach to tariffs is undertaken.
The regime follows the Department for International Trade having yesterday published Mutual Recognition Agreements (MRAs) between the UK and the US, the UK and Australia and the UK and New Zealand, which can take effect on 29 March 2019 if the UK leaves the EU without a deal, or at the end of an implementation period. The MRAs maintain the effects of the EU-Australia/EU-US/EU-New Zealand agreements in a bilateral context and covers areas including automotive products, medical devices and pharmaceuticals.
The MRAs provide some much needed reassurance to business, but overall, the UK strategy on trade is still a moving feast.
Looking ahead to this evening’s motion on no deal, and the fact Mrs May has offered Conservative MPs a free vote, the Commons looks all but certain to vote against the motion - remembering that in January, the Commons voted overwhelmingly for Dame Caroline Spelman’s amendment which sought to rule out no deal. Overall, much of the action today - and for the remainder of this week - will be focussed on what the Government calls for in its motion for extension, and what amendments may be tabled to that motion. They could range from a push for different durations, to those seeking to facilitate indicative votes next week. There are still hints No.10 is considering a third meaningful vote on the Brexit deal - possibly next week - but at the current rate of attrition, one more push would be unlikely to see the deal over the line.
19 February 2019
Another Government defeat - but Theresa May’s determination holds fast
Last week, Theresa May took another Brexit blow when Parliament defeated the Government's 'next steps' motion on Brexit by 303 to 258 votes. Although the vote is non-binding and does not provoke a change in intent, it arguably leaves Mrs May's chance of securing concessions from the EU on the backstop weaker.
The pressure is now on for May to make progress before the next crunch Brexit vote in the House of Commons on 27 February. However, Mrs May has three key areas to win ground in before then: The EU, conservative MPS and the Labour benches.
29 January 2019
Brexit amendments take shape
With the Prime Minister having delivered the opening speech in the debate on the Government’s proposed ‘next steps’ on Brexit, the extent of the moving parts still involved remains clear. Nevertheless, of the selected amendments, Graham Brady’s is now the frontrunner and the most crucial for the Government.
The amendment itself contains little detail, simply calling for a renegotiation of the backstop and “alternative arrangements” to be put in place. However the new Conservative plan that became public overnight (dubbed the ‘Malthouse plan’) was acknowledged by the Prime Minister as one of the potential options. Under the Malthouse proposals, Theresa May would seek to renegotiate the Irish backstop, whilst also extending transition to December 2021 to allow more time to agree a new trading relationship. If the attempt to renegotiate the backstop fails, the proposal also includes a ‘Plan B’ - for the Prime Minister to ask the EU to honour the agreed Brexit transition in exchange for which the UK would honour its agreed financial contributions and its commitments on EU citizens’ rights. The theory is that this would give both sides time to prepare for a departure on WTO terms at the end of 2021 - effectively a ‘managed no deal’ scenario.
For now, we await where expressed support actually rests at the crucial time. Voting is expected to begin tonight at around 7pm and as we have seen, the direction of travel can change quickly.
18 January 2019
As a somewhat extraordinary week in Westminster draws to a close, we can anticipate more of the same next week as Prime Minister Theresa May continues her cross-party talks to find a way through the impasse on Brexit in Parliament.
While MPs roundly rejected the deal, the vote provided no clarity on what Parliament would support. Therefore, Theresa May's objective is to now understand what the Commons supports, in contrast to what it opposes. Permanent membership of a customs union in the future relationship is thought to be one area of compromise that could win Labour votes. For now, though, Downing street is insisting that it would not support customs union membership.
The process of finding out whether a Plan B can be found begins on Monday (21 January) when the Government is expected to make a statement and table a motion on its next steps under the Withdrawal Act. A full day’s debate on the motion will take place on 29 January (subject to agreement of the House) and the votes will once again be politically significant. However the markets may be interpreting moves so far, the reality (for now) is that the default legal position remains no-deal exit on 29 March. Whether the chances around such an event increase or decrease (along with the possibilities of a general election and an extension of Article 50) waits to be seen.
If the last week has shown us anything, it has confirmed just how quickly the political narrative can change.
15 January 2019
Article 50 extension: an increasing prospect
After a General Affairs Council meeting last week in Brussels, some EU diplomats reportedly said that an extension of the Brexit negotiating period beyond 29 March is increasingly looking inevitable.
According to POLITICO EU, EU officials claimed that the UK government in denial on the prospects for a No Deal and that the UK has not still approached Brussels on the possibility of extending the negotiations.
Ireland’s Foreign Affairs Minister Simon Coveney said last Tuesday that his country is ready to support the extension of the negotiations if it was requested by the UK.
14 January 2019
The meaningful vote is due to take place tomorrow
After months of prevarication, MPs will be given the opportunity to vote on the terms of both the Withdrawal Agreement and the Political Declaration on the future UK-EU relationship, in what will be a defining moment for the Prime Minister, the Government and the outcome of Brexit.
Parliamentary arithmetic still looks bleak for the Government, with few MPs having changed their position since the deal was first tabled for debate in December. The ardent opposition from Eurosceptic members of the European Research Group, staunch pro-EU backbenchers and the DUP all lead to very bleak prospects for the passage of the current deal.
Following the Government's likely defeat this week, it remains unclear as to what their proposed course of action will be - with speculation that Ministers may seek to re-table the deal for a second vote, or seek an alternative course of action (such as membership of the EEA).
From the perspective of the Opposition, Labour has made it clear that the Party's priority is to force a General Election if the Government's deal is voted down, with Leader Jeremy Corbyn vaguely committing to "keep all options on the table" if this cannot be achieved - in order to avoid officially supporting calls for a second referendum.
7 January 2019
Recap: the position at the end of 2018
Government stepped up no deal preparations: The Cabinet met the week of 17 December and agreed to increase preparations for a no deal Brexit. This was followed by numerous reports in the media that emphasised the drastic measures expected, including keeping 3,500 troops on “standby”. Various members of cabinet made clear their opposition to allowing a no deal Brexit. Some stated they would quit the Conservative Party if it “were to announce that 'no-deal' Brexit had become its policy”.
Theresa May seeks assurances on backstop: The Prime Minister is hoping to secure legal assurances on the backstop agreed as part of the Withdrawal Agreement in her Brexit deal, in order to gain support for the deal from the DUP and Brexiteers within the Conservative Party. The deal will be voted on Tuesday 15 January (after a period of debate).
Bank of England responded to no deal contingency plans: The European Commission announced its latest contingency plans for a no deal Brexit, including Delegated Regulations aimed at addressing the issue of contract continuity of derivative contracts. HM Treasury and the Bank of England have already put in place a temporary recognition regime for non-UK CCPs and a transitional regime for non-UK CSDs. These will enable EU CCPs and CSDs to continue to provide services in the UK in a no-deal Brexit scenario.
13 December 2018
Brexit optimism on hold
Theresa May’s optimism at reaching a deal on Brexit proved short-lived. Since the Prime Minister took her deal to Parliament at the end of November, she has been faced with overwhelming opposition on all sides.
May’s Government lost three significant votes in the Commons, her anticipated TV debate was cancelled; she endured the reaction of postponing her meaningful Parliamentary vote on the Brexit Withdrawal Agreement, and has been told by Brussels that she must clarify what she wants out of talks. Having survived a vote of no confidence, she is though still standing.
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30 November 2018
The reality of sealing the deal
Brexit has taken one step closer to being concluded, but there remain significant hurdles ahead. Last weekend, the European Council officially concluded Article 50 negotiations with an endorsement of the Withdrawal Agreement and Political Declaration at an extraordinary Council meeting in Brussels. As expected, the meeting was largely a procedural affair, despite some last-minute posturing over lingering issues like fishing rights and Gibraltar.
The political battle now begins at home for the Prime Minister
The Cabinet, with Theresa May at the very forefront, have admitted the vote on the deal would be “challenging” but it now must make it clear to colleagues and to the country that “the choice is between this deal or the uncertainty that would flow if this deal does not go through”.
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12 November 2018
Threats to exporters if no Brexit agreement is reached
Brexit provides economic threats to exporters, with such things as higher tariffs, and stricter border checks and packaging regulations. In addition, are a number of uncertainties to the legal framework, such as what a no-deal Brexit (no-deal) would mean for key contractual terms in cross-border disputes, when the current laws that underpin their validity are predominantly EU law?
19 September 2018
Mapping the Brexit storm - supply chain concerns post-Brexit
In September 2018, at the Zero Emission Vehicle Summit in Birmingham, the Chief Executive of Jaguar Land Rover (JLR), Ralph Speth, raised fresh concerns around the continued operation of UK manufacturing plants after Brexit. In front of both the Prime Minister and members of the cabinet, Speth warned of the ‘tens of thousands’ of jobs at risk and the uncertainty of UK plants remaining in operation in the event the UK fails to reach an agreement with Brussels.
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30 August 2018
Brexit White Paper: protecting the UK life sciences industry
The UK government published its White Paper on 12 July 2018, setting out a future trading relationship with the EU, laying the foundation for the future.
The government’s vision with regard to the life sciences industry offers some much needed reassurance to the sector. Indeed, the proposals appear to respond to the recommendations made to government by the House of Commons select committee on how to safeguard the industry from the impact of Brexit.
9 August 2018
Giving insurance a voice: Brexit ‘nightmare’ for industry unless government breaks political deadlock
We are delighted to introduce our latest report - Brexit and the insurance sector: Towards 2020 and beyond - as part of Kennedys’ ongoing commitment to providing key business insights on Brexit and how it is likely to impact on the UK’s insurance sector.
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30 January 2018
EU motor law: the impact of Brexit for the UK
Britain’s motor industry is a ‘star performer’ of the UK economy. Its reported turnover was a record £71.6 billion in 2015. Accepting the benefit that membership of the European Union (EU) has allowed, the industry is understandably nervous about the potential effects of the UK leaving the EU, including big-ticket issues such as exports and attracting and retaining EU talent.
Against the background of uncertainty over future trading relations with the remaining Member States - that may hit inward investment in the motor industry in the UK - we reflect on the key challenges and issues that lie ahead.
4 May 2017
Belgium bound? What does Lloyd’s proposed subsidiary in Brussels mean for London?
The day after Prime Minister Theresa May triggered Article 50 to begin the Brexit process, Lloyd’s of London confirmed its plans to open a new European insurance subsidiary in Brussels.
Whilst Lloyd’s already has a number of offices in the EU and the European Economic Area (EEA) states, and indeed globally, the move to open a subsidiary in Brussels may indicate a shift of focus from the UK following Brexit.
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7 October 2016
EU air law: the impact of Brexit for the UK
The single air transport market is seen as one of the greatest achievements of the European Union. It has reduced fares for consumers and increased passenger numbers, whilst ensuring passenger safety, security and consumer protection. It has also created an EU vehicle through which current and future air transport relationships with non-EU countries are defined.
We review the challenges ahead, in particular those relating to market access, and consider potential alternatives to the current EU single air transport market.
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26 September 2016
Brexit and securing the passport
For insurers operating in London or the UK, as part of a wider European business strategy, the passporting implications of Brexit are significant.
Insurers need to understand what the implications are for their business either losing or maintaining passporting rights from the UK into the EEA (and vice versa). They need to consider how they can best structure their businesses to preserve passporting rights within the EEA, if that is important to them. Finally, they need to consider whether they can afford to wait before acting, given the uncertainties surrounding what the UK’s eventual access to the single market will be and how long that will take to be established.
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27 May 2016